Cash is king in Routt County condo market

Weekly Routt County figures for pending real estate contracts for July 4 to Sept. 19

Photo by Tom Ross

The recent sale of a condominium at the Promontory involved a trade-up to a single-family home and plenty of cash. Of 17 Steamboat condominium sales this year, 10 were to cash buyers.

Steamboat Springs  Cash is key in condo sales as the Steamboat Springs real estate market closes out the third quarter of 2011.

Prudential Steamboat Realty realtor Mark “Dutch” Elting said he issued a report to clients this week alerting them to the fact that in the price range between $350,000 and $750,000, just 17 condos have sold to date. Of those, 10 were purchased by cash buyers.

“I have five condos listed in that range, and the clients are calling me and asking me to get them sold,” Elting said. “It’s good to be a buyer right now.”

Prudential Steamboat Realty co-owner Cam Boyd said pending sales trends show more people are on their way to becoming buyers this month than in July or August.

Real estate closings are the most readily available statistical measurements of the market to the general public. However, with the time needed to close on sales this year, closings show up four to six weeks after properties go under contract.

Boyd said as of Monday, the number of pending contracts was 125, compared to a seasonal low of 72 on July 18. On Aug. 1, the number had climbed to 100, and after several relatively flat weeks, the number of pending sales climbed to 111 at the end of August.

Elting’s colleague at Prudential, Cheryl Foote, helped a client purchase a three-bedroom condominium at the Promontory, an older project in one of the most desirable slopeside locations in Steamboat.

It was the first sale of a Promontory unit since 2010, Foote said. She would know — she sold the last one for $425,000.

The Aug. 25 sale of the 1,476-square-foot unit was not a traditional sale, however. Foote and Jim C. Hansen, of Keller Williams Realty, engineered a trade.

Her clients were interested in selling a 4,757-square-foot home close to Rollingstone Ranch Golf Course in Country Club Highlands, but they did not want to leave Steamboat altogether and would consider trading down into a less expensive property.

“Trades are tricky, because typically the party that’s trading up can’t have a mortgage,” Foote said. “If both parties have a mortgage, you can’t get them both paid off at closing.”

In this case, Hansen’s clients paid cash for the $1.45 million house, less a $375,000 credit for the selling price of the Promontory condo.

The sales are handled as separate transactions, and in the case of trades, Foote said, realtors’ commissions are negotiable.

Boyd said flexibility on the part of the buyer trading up also is a significant factor in facilitating a trade.

“It’s easier to adjust the price by 20 percent on a $350,000 condo” to make the deal work, he said. “Trades work real well if you can find the right parties.”

The condo market has more to do with Fannie Mae and Freddie Macs reluctance to lend on condominiums, not the banks. The banks will lend, there is just no where to sell the loan. Therein lies the problem. Fannie and Freddie are a clown show.